Learning The Secrets About Funds

A Guide to Online Business Loans

In case you are an entrepreneur who is looking for capital to jump-start your business, you may want to look beyond traditional banks for your funding needs. Whether it is a short term loan or an installment loan you need, there are loans you can apply over the Internet which are known as online loans.

Ten years ago, the rarity of online business loans did not make it a viable alternative for borrowers. Conventional banks were still the preferred source of funding by small business owners. Fast forward to today and commercial banks still lead the way when it comes to providing credit even though regular banks loans are very challenging to secure.

There are reasons why commercial banks tighten access to credit for small businesses. Rightly or wrongly, they still think lending to small businesses is a risky proposition. There is also the notion that the process of extending credit to small businesses is just as laborious as lending to bigger businesses but with lower returns. Because of these reasons, only a small percentage of small businesses can qualify for bank loans nowadays.

This is where online business loans can be helpful. What commercial banks won’t serve, online lenders are there to extend credit to small enterprises. If you applied for a bank loan for your startup business and was declined, you may want to consider an online loan. So what makes an online business loan different from a bank loan?

Quick cash

Anyone who has tried processing an application for a regular bank loan knows that it can take days before the results are known. This is different from applying to an online lender wherein the process is much, much faster.

This is because alternative lenders such as those offering online business loans do not have to deal with a number of government regulations that banking institutions have to follow. That means online loan processing will also require no paperwork. You do not waste time looking for and gathering documents as the lender won’t need them in processing your application. And because it is online, expect the processing time of your small business loan application to speed up considerably.

Accommodating options

The business loans offered by regular banks are very traditional such as term loans, credit cards, and lines of credit. On the other hand, online business lenders can adapt their loan products according to your needs. You are not bounded to old loan offerings. Depending on your purpose, there is an online business loan that corresponds to your needs.

In addition, online business loans come in varying amounts subject to how much you need for your small business. While most banks won’t lend for less than R250,000, online lenders can lend from R5,000 to R250,000.

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